VUG vs VOO: Side-by-Side ETF Comparison

VUG vs VOO: VUG focuses on growth stocks with 52.5% tech allocation and a 29.67 P/E ratio, while VOO offers broader S&P 500 exposure at 35.1% tech with a lower 22.44 P/E. The growth tilt costs you dividend income - VUG yields just 0.41% compared to VOO's 1.13%.

Table of Content

• Annual & Cumulative Returns
• Risk Metrics
• Dividend Yield & Growth
• Fees & Liquidity
• ETF Composition: Asset Classes
• Regional Allocation
• Sector Weights
• Top 10 Holdings
• Valuation & Growth Metrics
• Which ETF Fits Your Portfolio?
• FAQ

ETF Issuers & Investment Objective

Both VUG and VOO come from Vanguard, the company that built its reputation on low-cost index investing, yet they serve different purposes. VUG tracks the CRSP US Large Cap Growth Index, which means it filters the large-cap universe for companies with higher price-to-earnings ratios and stronger earnings growth expectations. The result is a portfolio that leans heavily into technology (52.5% of assets) and trades at a premium valuation of 29.67 times earnings. VOO simply owns the entire S&P 500, giving you the whole market in market-cap weights without any growth screens.

The practical difference shows up in the numbers. VOO's 0.03% expense ratio beats VUG's already low 0.04%, and its 1.13% dividend yield nearly triples VUG's 0.41% payout since it includes dividend stalwarts that growth screens typically exclude. While both funds posted similar one-year returns (14.43% vs 13.99%), VUG's concentration in high-flying tech stocks creates more volatility around that performance. Investors choosing between them aren't really picking between good and bad - they're deciding whether they want the entire market or just the growth slice that's already run up quite a bit.

Annual & Cumulative Returns

VUG's growth focus paid off over longer stretches, with a 28.6% annualized gain over the past three years beating VOO's 21.5% by seven percentage points. Stretch the window to ten years and the gap narrows but still favors VUG at 18.1% versus 15.7%. The shorter view flips the script: VOO edged ahead 1.1% year-to-date while VUG slipped 0.9%, and the S&P 500 tracker also took the one-year race 14.4% to 14.0%. Five-year numbers land almost dead even at 13.9% and 14.1%, showing how quickly leadership can swap.

What this means is timing matters. Growth stocks' higher earnings multiples (VUG trades at 29.7 times earnings against VOO's 22.4) make the fund more sensitive to rate shifts and sentiment swings, so expect deeper dips when markets get skittish and bigger pops when risk appetite returns. If you prefer a smoother ride and the extra dividend income (VOO yields 1.1% to VUG's 0.4%), the broad index is the steadier bet. Those willing to tolerate sharper volatility for the chance of extra long-term upside might lean toward VUG, provided they can hold through the cycles.

Risk Metrics

VUG's volatility tells the story of a growth-focused portfolio that feels every market swing. At 16% over the past year, it's roughly 50% more volatile than VOO's 11%. That gap stays consistent over three years too - 15.6% versus 12%. Investors pay for this extra bumpiness, though the Sharpe ratio suggests they're getting paid for it. VUG's 1.59 three-year Sharpe ratio edges out VOO's 1.4, meaning each unit of risk taken has generated slightly better returns.

The numbers paint a clear picture: VUG offers higher risk-adjusted returns but demands a stronger stomach. You'll need to endure bigger swings - think 5-6% more volatility annually - for what amounts to modestly better risk-adjusted performance. Whether that trade-off works depends on your timeline and temperament. Long-term investors who can tune out the noise might find VUG's risk premium worthwhile. Those who check their portfolio daily and hate volatility will likely sleep better with VOO, even if it means giving up some risk-adjusted upside.

Dividend Yield & Growth

The dividend gap between these two Vanguard ETFs tells you everything about their investment focus. VOO's 1.13% yield is nearly triple VUG's 0.41%, which makes sense when you consider what each fund holds. VUG is packed with growth companies like Apple and Microsoft that prefer to reinvest profits rather than pay them out, while VOO's broader S&P 500 mix includes dividend stalwarts like Johnson & Johnson and Coca-Cola.

This 0.72 percentage point difference might not sound dramatic, but it adds up over time. On a $100,000 investment, VOO would generate about $1,130 in annual dividend income versus just $410 from VUG. Neither fund will make you rich from dividends alone - both yields trail the broader market's historical average - but VOO offers noticeably more cash flow if that's important to your strategy. Just remember that VUG's lower yield comes with the trade-off of higher growth potential, as those companies are reinvesting for expansion rather than paying shareholders directly.

Fees & Liquidity

VUG costs 0.04% a year while VOO charges 0.03%, so on a $10,000 position the difference is one dollar basically a rounding error. Both ETFs trade millions of shares daily and their tiny bid-ask spreads mean you’ll lose more to market noise than to commissions, so for buy-and-hold investors the fee gap is immaterial.

What matters more is where that extra basis point goes: VUG’s higher growth tilt produces a 0.41% dividend yield versus VOO’s 1.13%, so VOO’s lower expense ratio and richer income stream give it a slight cash-flow edge. Unless you’re running a very large, tax-sheltered account and care about every hundredth of a percent, pick the portfolio you want first fees won’t be the deciding factor.

ETF Composition: Asset Classes

Both ETFs are almost entirely invested in U.S. stocks VUG parks 99.6% of its assets there, while VOO is only a hair lower at 99.1%. The tiny residual is mostly idle cash and a trace of foreign listings that tag along when S&P 500 or CRSP growth constituents do business abroad. Those slivers won’t move the needle; what matters is that neither fund offers any built-in bond or international ballast, so whatever diversification you get comes from the equity mix itself.

That near-identical domestic weight masks a style difference you can’t see in the asset-class table. VUG’s “growth” filter funnels money toward companies whose value is tied up in future earnings, so its 29.7 P/E and 0.4% yield feel stretched compared with VOO’s 22.4 P/E and 1.1% yield. If U.S. large-caps hit a rough patch, both funds will fall in lockstep, but VUG’s heavier tech tilt (52.5% vs 35.1%) means the dip will likely be deeper and the rebound sharper. Pick VUG only if you’re comfortable amplifying the domestic equity ride; stick with VOO for the broadest, most neutral slice of the U.S. market.

Regional Allocation

Both funds are essentially all-in on the U.S. market: VUG parks every dollar in North-American listings, while VOO keeps 99.5% there. The tiny 0.5% "rest-of-world" slice in VOO is just the S&P 500's foreign listings think Unilever's NYSE ADR or Taiwan Semiconductor's U.S. share class so you're still getting domestic-large-cap exposure dressed in different paperwork. In short, neither ETF offers any meaningful hedge against a weak dollar or a rally in overseas markets.

For investors who already own international funds, this overlap is actually helpful: you won't double-dose on Europe or Japan. But if you're buying only one ticket and want built-in geographic balance, neither VUG nor VOO fits that bill; you'll need to pair either one with a separate international holding.

Sector Weights

VUG's sector makeup reads like a tech enthusiast's wish list: more than half the portfolio sits in technology stocks, with another 16.5% in communication services. That 52.5% tech weighting isn't just high it's nearly triple the 35.1% you'll find in VOO. The growth fund also shows a clear preference for consumer cyclicals at 12.8% versus 10.6% in the S&P tracker. Meanwhile, traditional value sectors barely register. Energy sits at just 0.3%, financial services get a 5.4% allocation, and healthcare represents only 5.6% of holdings.

The sector story flips when you look at VOO's broader diversification. Financial services claim 13% of the index, energy stocks have a meaningful 2.8% weighting, and industrials make up 7.5%. Healthcare gets nearly double the allocation at 9.6%. This matters because VUG's heavy tech concentration means your returns will live or die by Silicon Valley's fortunes. When growth stocks soar, VUG should outpace. But when tech stumbles or value rotates into favor, VOO's more balanced approach should hold up better. The choice comes down to whether you want to bet on growth's continued dominance or prefer the safety of owning the entire market.

Top 10 Holdings

The concentration gap jumps off the page. VUG has parked almost 45% of its money in just five names, with NVIDIA alone eating up 12.7% of the fund. VOO holds the same stocks, but the biggest position, again NVIDIA, tops out at 7.8%. That 500-basis-point spread means VUG’s day-to-day moves live or die on how a handful of mega-cap growth names trade, while VOO’s broader 353-stock cut of the S&P 500 smooths the ride.

For anyone choosing between them, the question is how much single-name drama you’re willing to swallow. When tech rallies, VUG’s overweight has helped notice the 29.7 P/E versus VOO’s 22.4 but the same skew cuts both ways. If AI spending slows or Apple’s next iPhone cycle disappoints, VUG will feel it first and harder. VOO still gives you the same ecosystem, just diluted across banks, industrials, and health-care names you won’t find in the growth fund.

Valuation & Growth Metrics

VUG trades at 29.7 times earnings and 9.6 times book value, roughly a third higher than VOO’s 22.4 P/E and more than double its 4.6 P/B. The same premium shows up on sales: VUG’s price-to-revenue sits at 7.4 versus 3.2 for the S&P 500 tracker. In short, you’re paying a growth-market markup for every dollar of current profits, assets, or sales.

That richer price buys faster expansion. Long-term earnings are expected to compound at 12.2 % for VUG against 10.5 % for VOO, and the portfolio’s historical earnings growth clocks in at 24 %, more than twice the broad index’s 10.2 %. Sales growth follows the same pattern 12.5 % versus 8 % so the premium isn’t just hope; it’s tied to companies that are actually growing the top line faster. Whether the valuation gap is justified depends on how long that differential can persist.

Which ETF Fits Your Portfolio?

Your choice comes down to what you want from your large-cap allocation. VOO gives you the full S&P 500 at a 0.03% expense ratio and a 1.13% yield - basically the market return with a bit of income attached. VUG costs one basis point more, pays about a third as much in dividends, and concentrates 52% of the portfolio in tech names trading at nearly 30x earnings. When growth rallies, that bet pays off. When it doesn't, you feel it.

Neither fund is "better." If you already own broad market funds, VUG can tilt you toward faster-growing companies without stock-picking. If you want one fund to anchor a portfolio, VOO's blend of growth and value, plus its higher dividend, makes it the simpler long-term hold. Just know that with VUG you're making an active bet on continued tech dominance - the numbers make that clear.

If you want to have look at other ETF comparisons, check out this: Fund Overlap Tool

Data sources: The data has been obtained from the ETF provider's website and ETF fact sheet.

FAQ

Is VUG better than VOO?

VUG isn't inherently better than VOO, they just serve different purposes. VUG's 18.14% ten-year return beats VOO's 15.69%, but you get more volatility (16.02% vs 10.99%) and a lower dividend yield (0.41% vs 1.13%). If you want pure growth exposure with heavy tech concentration (52.5% vs 35.1%), VUG fits. For broader diversification across the whole market, VOO makes more sense.

Does VUG outperform the S&P 500?

VUG has beaten the S&P 500 over the past decade with an 18.14% annual return versus VOO's 15.69%, though this came with higher volatility. The growth ETF's recent edge has narrowed, trailing VOO by 0.44 percentage points in the past year and showing negative year-to-date returns of -0.89% compared to VOO's 1.07% gain.

Does VUG pay dividends?

Yes, VUG pays dividends, though the yield is modest at 0.41%. That's significantly lower than VOO's 1.13% yield, which makes sense since VUG focuses on growth companies that typically reinvest earnings rather than pay them out.

Is VUG a good growth ETF?

VUG has delivered solid growth returns, with an 18.14% annualized 10-year return compared to VOO's 15.69%. The fund's heavy tech concentration (52.5% of holdings) and P/E ratio of nearly 30 means you're paying a premium for growth, but the 3-year Sharpe ratio of 1.59 shows it's compensated investors well for the extra volatility.

Does VOO outperform the S&P 500?

VOO can't outperform the S&P 500 because it is the S&P 500 - the fund tracks the index almost perfectly, minus its tiny 0.03% expense ratio. The fund's 1-year return of 14.43% essentially mirrors what the underlying index delivered over that period.

What are the expense ratios of VUG vs VOO?

VUG costs 0.04% annually while VOO charges 0.03%. The difference is minimal - just one dollar per year on a $10,000 investment.

Which ETF is more volatile?

VUG is clearly the more volatile choice, with 1-year volatility of 16.02% compared to VOO's 10.99%. The gap narrows slightly over three years but remains significant, VUG at 15.64% versus VOO at 11.96%.

How do VUG's and VOO's sector weights differ?

VUG puts more than half its money in tech stocks (52.5%) while VOO keeps technology at 35.1%. The growth fund also leans heavily on communication services (16.5% vs 10.9%) and consumer cyclicals (12.8%), whereas VOO spreads things out with 13% in financial services - a sector VUG barely touches.

Can I hold both VUG and VOO?

Yes, you can hold both VUG and VOO together. Many investors do this since they complement each other - VUG gives you concentrated growth exposure with 52.5% in tech stocks, while VOO provides broader market coverage across all sectors. Just be aware there's overlap, as their top five holdings are nearly identical companies.

Which is better for dividend income?

Neither VUG nor VOO are designed for dividend income, but VOO's 1.13% yield is nearly three times VUG's 0.41%. Growth stocks in VUG typically reinvest profits rather than pay dividends, while VOO's broader mix includes more established dividend payers. If you're building a portfolio focused on income, you'd probably want to look at dedicated dividend ETFs instead of either of these options.